The city council committee Wednesday evening approved issuing the construction permits, which is considered the last stage before building of settlements can start.

"The local planning and building committee had dealt with request of private enterprises to approve building permits for 386 units in Har Homa, 136 units in Neve Yakov and 36 units in Pisgat Zeev for plans approved years ago," the Jerusalem municipality said in a statement.

The areas are considered disputed, with settlements illegal under international law.

JUST WATCHED

Palestine: The facts on the ground

MUST WATCH

JUST WATCHED

Israel fears outcome of Syrian fighting

MUST WATCH

Israel fears outcome of Syrian fighting02:22

"I oppose to this annexation for new buildings, what Israel and the municipality are doing is constructing unilaterally without consultation with anyone," said Pepe Alola, who also serves as chairman of Meretz party.

An Israeli settlement watch group described it as another blow to peace efforts.

"It's a shameful decision for a government that seeks a solution for a two-state solution would choose to issue so many permits for settlements units in East Jerusalem and the West Bank. This is not the first time ... just another development of making a solution for Jerusalem much more difficult," said Lior Amihai, deputy director of Peace Now.

Palestinian officials said it will sabotage ongoing talks between the two sides.

"Israeli Prime Minister Benjamin Netanyahu is deliberately sending a strong message to the United States, Europe and the rest of the world that he has no intention of adhering to international law and the will of the international community," said Hanan Ashrawi, a member of the Palestinian Executive Committee.

In July, U. S. Secretary of State John Kerry engaged Israelis and Palestinians to start a nine-month negotiation process that will lead to a framework on future agreements.

As the April deadline nears, efforts have not yielded any agreement.

Israel seized Jerusalem in 1967 and later annexed the city unilaterally, a move the international community does not recognize.

Palestinians want East Jerusalem to be part of their future state in any final status negotiations.